Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — NAREIT November 2014
50 slides from Ashford Hospitality Trust's conference presentation, Nov 5, 2014
Slide 1: Ashford Hospitality Prime - NAREIT November 2014
JX ASHFORD HOSPITALITY PRIME NAREIT - November 2014
Slide 2: Safe Harbor
Safe Harbor 2 In keeping with the SEC's "Safe Harbor" guidelines, certain statements made during this presentation could be considered forward-looking and subject to certain risks and uncertainties that could cause results to differ materially from those projected. When we use the words "will likely
Slide 3: Strong Track Record & Performance
Strong Track Record & Performance 3
Slide 4: Demonstrated Long-Term Track Record
Demonstrated Long-Term Track Record 4 • Disciplined growth, operational expertise, and capital allocation to maximize shareholder returns • AHP expects to benefit from strong management capabilities Peer average includes: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Trailing Total Sha
Slide 5: Highly-Aligned Management
Highly-Aligned Management 5 • With insider ownership* of approximately 13% for AHP, management is highly-aligned with shareholder interests Publicly-Traded Hotel REIT Insider Ownership Public Lodging REITs include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Source: Company filings.
Slide 6: Compelling Opportunity
Compelling Opportunity foe An Fe
Slide 7: Compelling Opportunity
7 Compelling Opportunity High quality portfolio predominantly located in gateway & resort markets Low leverage strategy in line with peers Highly-aligned management team Portfolio is in great physical condition after recent renovations Company currently trading well below estimated private
Slide 8: Well-Defined Strategy
8 Well-Defined Strategy Invest in high quality, high RevPAR hotels (RevPAR > 2x the national average) located in gateway & resort markets Conservative leverage with target (Net Debt + Preferred Equity) / EBITDA of 5.0x or less
Slide 9: Well-Positioned Portfolio
9 58% 27% 10% 4% Ashford Prime Brands by EBITDA Marriott Hilton Sofitel Independent 58% 27% 10% Ashford Prime Managers by EBITDA Marriott Remington Hilton Accor 96% 4% * Ashford Prime MSA by EBITDA Top 25 Other 30% 55% 15% Ashford Prime Segment by EBITDA Upscale Upper-Upscale Luxury *Represents Key
Slide 10: Recently Renovated Portfolio
10 Recently Renovated Portfolio Property Renovation Completion Date Cost/Budget Hilton Torrey Pines Public Space Guestrooms Meeting Rooms 2010-2015 $17,200,000 Capital Hilton Guestrooms Public Space Mechanical Systems 2011-2012 $29,900,000 Pier House Resort Guestrooms Public Space Mechanical Systems
Slide 11: Conservative Capital Structure
Conservative Capital Structure 11 Balance Sheet Initiatives Debt Maturities Net Working Capital Enterprise Value 411.9 8.1 265.1 - 100.0 200.0 300.0 400.0 500.0 2014 2015 2016 2017 2018 De b t ( $ i n m il li o n s) Fixed-Rate Floating-Rate » Target (Net Debt + Preferred)/EBITDA < 5.0x » Maintain mi
Slide 12: Compelling Valuation
12 Compelling Valuation $392,676 $372,334 $313,417 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 Ashford Prime Estimated Replacement Cost Estimated Private Market Value Current Trading Value • Ashford Prime is currently trading well below estimated replacement cost
Slide 13: Chicago Sofitel Transaction
13 Property Information: • Location: Downtown Chicago (Gold Coast submarket) • Rooms: 415 (including 32 suites) • Year Built: 2002 • 10,000 sf of meeting space • Fee simple; 32 story tower • Segmentation: 70% transient; 30% group Acquisition Overview: • Purchase Price: $153 million • Purchase Price/
Slide 14: Pier House Resort Transaction
14 Pier House Resort Transaction Property Information: • Location: Key West, FL • Rooms: 142 (including 21 suites) • Year Built: 1968 • 2,600 sf of meeting space • Fee simple • Segmentation: 93% transient; 7% group Acquisition Overview: • Purchase Price: $92.7 million • Purchase Price/Key: $653,000
Slide 15: Growth & Acquisition Strategy
Growth & Acquisition Strategy 15
Slide 16: Growth & Acquisition Strategy
16 Highly quantitative approach focused on long-term accretion Proven track record of value-creating acquisitions Disciplined capital allocation Multiple ways to grow platform: Unique built-in pipeline via option hotel and right-of-first-offer hotels from Ashford Trust Targeted acquisiti
Slide 17: Projected Hotel Room Value Growth
Projected Hotel Room Value Growth 17 Source: JLL/HVS • U.S. hotel transaction volume is likely to increase over the next several years as private U.S. hotel market values rise $0 $10 $20 $30 $40 $50 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 $130,000 $140,000 2000 200
Slide 18: Marriott Gateway & ROFO Hotels
18 Marriott Gateway & ROFO Hotels Hotel Market Rooms Ritz-Carlton Atlanta, GA 444 Rooms Hilton Back Bay Boston, MA 390 Rooms Courtyard Downtown Boston, MA 315 Rooms Embassy Suites Portland, OR 276 Rooms Embassy Suites Crystal City Washington, D.C. 267 Rooms Crowne Plaza Beverly Hills* Los Angeles, C
Slide 19: Accretive Growth
Accretive Growth 19 - Ashford Prime management is focused on accretive growth - Our definition of accretion: the 5-year Total Shareholder Return (TSR) post-transaction must be greater than the 5-year TSR pre-transaction - Transactions are modeled on a leverage-neutral basis Base Model Transaction (L
Slide 20: Ashford Hospitality Trust - NAREIT November 2014
ZX. ASHFORD HOSPITALITY TRUST NAREIT - November 2014
Slide 21: Safe Harbor
Safe Harbor 21 In keeping with the SEC's "Safe Harbor" guidelines, certain statements made during this presentation could be considered forward-looking and subject to certain risks and uncertainties that could cause results to differ materially from those projected. When we use the words "will likel
Slide 22: Strong Track Record & Performance
Strong Track Record & Performance 22
Slide 23: Demonstrated Long-Term Track Record
23 • Disciplined growth, operational expertise, and capital allocation to maximize shareholder returns • AHT expects to benefit from strong management capabilities Peer average includes: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Trailing Total Shareholder Returns as of 10/29/14 Sou
Slide 24: Highly-Aligned Management
Highly-Aligned Management 24 • With insider ownership* of approximately 17% for AHT, management is highly-aligned with shareholder interests Publicly-Traded Hotel REIT Insider Ownership Public Lodging REITs include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Source: Company filings.
Slide 25: Compelling Opportunity
Compelling Opportunity 25
Slide 26: Compelling Opportunity
26 Compelling Opportunity Proven track record of long-term value creation for shareholders Highly-aligned management team Diversified portfolio with 67% of hotels managed by affiliated property manager Leveraged way to invest in the hotel cycle Opportunity for future platform creation At
Slide 27: Opportunistic Strategy
27 Opportunistic Strategy Opportunistically invest in hotel assets with up to 2x the national average RevPAR in all market locations Opportunistic use of non-recourse debt to maximize shareholder returns
Slide 28: Portfolio Overview
Portfolio Overview 28 *FY 2013 Hotel EBITDA
Slide 29: Strong Asset Performance
29 50.1% 42.8% 60.0% 69.4% 55.3% 0% 20% 40% 60% 80% 2009 2010 2011 2012 2013 Hotel EBITDA Flow-Through Annual Hotel EBITDA Flow-Through 2012 2013 YTD Q3 2013 YTD Q3 2014 Var RevPAR $94.65 $97.14 $98.67 $107.95 9.4% Hotel Revenue $1,013,117 $1,034,819 $790,484 $852,274 7.8% Hotel EBITDA $305,719 $317
Slide 30: Ashford Trust - Capital Structure
Ashford Trust – Capital Structure 30 » Target Net Debt/Gross Assets of 50-60% » Maintain mix of fixed and floating rate debt » Ladder maturities » Proactively refinance upcoming maturities » Maintain excess cash balance to capitalize on opportunities » Focus on property-level, non-recourse debt Bala
Slide 31: Compelling Valuation
31 Compelling Valuation $248,496 $173,605 $165,171 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 Ashford Trust Estimated Replacement Cost Estimated Private Market Value Current Trading Value $ per ke y • Ashford Trust is currently trading well below estimated replacement cost and estimated pr
Slide 32: Highland Investment Update
32 Acquisition • Transformational 28-hotel, $1.3 billion acquisition • Invested in the mezzanine debt in 2008 via joint venture • Completed foreclosure & restructuring in March 2011 with new $150 million investment from Ashford Trust & $50 million investment from JV partner • Ashford Trust owns 72%
Slide 33: Marriott Fremont Transaction
33 Marriott Fremont Transaction *TTM through 9/30/14 Strengths/Opportunities: • Excellent location in strong Silicon Valley hotel market • Diversified customer base • High quality asset with minimal capex needs – recently renovated guestrooms, meeting space and Greatroom- certified lobby • Opportuni
Slide 34: Growth & Acquisition Strategy
Growth & Acquisition Strategy 34
Slide 35: Growth & Acquisition Strategy
35 Highly quantitative approach focused on long-term accretion Proven track record of value-creating opportunistic acquisitions Disciplined capital allocation Multiple ways to grow platform: Internal growth from asset performance Portfolio/single asset acquisitions Highland portfolio o
Slide 36: Accretive Growth
Accretive Growth 36 - Ashford Trust management is focused on accretive growth - Our definition of accretion: the 5-year Total Shareholder Return (TSR) post-transaction must be greater than the 5-year TSR pre-transaction - Transactions are modeled on a leverage-neutral basis Base Model Transaction (L
Slide 37: Projected Hotel Room Value Growth
Projected Hotel Room Value Growth 37 Source: JLL/HVS • U.S. hotel transaction volume is likely to increase over the next several years as private U.S. hotel market values rise $0 $10 $20 $30 $40 $50 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 $130,000 $140,000 2000 200
Slide 38: Ashford Inc. Growth Opportunities
38 Real Estate Hedged Equity Strategy Ashford Inc. Pro Forma Structure To be spun-off as a publicly traded entity (ticker "AINC") Asset management platform Fee structure based on 70bps of total enterprise value plus incentive fees based on total shareholder returns vs. peer set Potential Fut
Slide 39: Appendix
APPENDIX 4. ASHFORD 4. ASHFORD [
Slide 40: Ashford Family of Companies
40 Ashford Family of Companies - Publicly Traded (NYSE: AHP) - 10 hotels - 3,472 owned rooms - Market Cap of $1.3 billion - High RevPAR portfolio - US & international gateway markets - Lower-leverage platform - Publicly Traded (NYSE: AHT) - 116 hotels – 23,063 owned rooms - Market Cap of $4.4 billio
Slide 41: Industry Overview
Industry Overview 4 ASHFORD 4. ASHFORD
Slide 42: Attractive Supply/Demand Imbalance
• Demand expected to exceed supply through at least 2015 42 Attractive Supply/Demand Imbalance Source: PKF -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F Supply Growth Demand Growth Yea r- o v e r- Year % Gro w th PKF Forecast
Slide 43: PKF RevPAR Growth Forecasts
43 Source: PKF 7.7% 6.1% -2.0% -16.7% 5.4% 8.2% 6.8% 5.4% 8.2% 6.7% 5.8% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% Historical RevPAR Growth Forecasted RevPAR Growth PKF RevPAR Growth Forecasts
Slide 44: Potential Industry EBITDA Growth Rates
44 Potential Industry EBITDA Growth Rates *Based on PKF RevPAR/ADR/Occupancy projections and EBITDA growth resulting from PKF EBITDA change regression equation. • With strong potential RevPAR gains, those companies with reasonable flow-throughs could experience significant EBITDA growth • PKF estima
Slide 45: Historical Industry Stock Returns
• Historically, attractive returns remain for investors from this point in the lodging cycle 45 Historical Industry Stock Returns Index includes AHT, BEE, DRH, FCH, HST, HT, LHO, and SHO. Companies are included in the data from the time of their IPO Current data as of October 31, 2014 % 50% 100% 150
Slide 46: Executive Bios
Executive Bios 4 ASHFORD 4 ASHFORD
Slide 47: Executive Bios
47 Executive Bios Monty J. Bennett Chief Executive Officer & Chairman of the Board Douglas A. Kessler President Mr. Kessler is the President of Ashford Hospitality Advisors and serves as the President of both Ashford Hospitality Trust (NYSE: AHT) and Ashford Hospitality Prime (NYSE: AHP). He is curr
Slide 48: Executive Bios
48 Executive Bios David A. Brooks Chief Operating Officer, General Counsel & Secretary Mr. Brooks is the chief Operating Officer, General Counsel & Secretary of Ashford Hospitality Advisors and serves as Chief Operating Officer, General Counsel & Secretary of both Ashford Hospitality Trust (NYSE: AH
Slide 49: Executive Bios
49 Executive Bios J. Robison Hays Senior Vice President, Corporate Strategy & Finance Mr. Hays is the Senior Vice President of Corporate Strategy & Finance of Ashford Hospitality Advisors and serves as the Senior Vice President of Corporate Strategy & Finance of both Ashford Hospitality Trust (NYSE:
Slide 50: Executive Bios
50 Executive Bios Mark L. Nunneley Chief Accounting Officer Mr. Nunneley is the Chief Accounting Officer of Ashford Hospitality Advisors and serves as the Chief Accounting Officer of both Ashford Hospitality Trust (NYSE: AHT) and Ashford Hospitality Prime (NYSE: AHP). He has served as the Chief Acco